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Belgian lender KBC Group has completed the sale of its private equity portfolio to Swiss alternative asset manager LGT Capital Partners in a rare form of secondaries deal.

In a statement KBC confirmed that it had transferred the bulk of its private equity to a new fund backed by LGT in a so-called "secondaries direct transaction" – whereby the vendor directly transfers a number of companies simultaneously into a new fund backed by another party – for an undisclosed sum.

KBC will retain a minority stake in the new fund, now called KeBeK Management, while the portfolio will continue to be managed by the former KBC private equity team led by Floris Vansina.

A spokesman for LGT said that the firm will make available “substantial” capital for the team to make new acquisitions for the existing portfolio which is predominantly made up of equity and mezzanine positions in lower mid-market companies in the Benelux region.

Floris Vansina, chief executive of KBC Private Equity, said: "Whereas this transaction implies the near completion of the divestment plan of KBC PE, it also heralds the launch of a new, independent fund manager that will be active in private equity investments. In addition, this transaction offers continuity and stability to the portfolio companies that are being transferred to KeBeK I."

The decision brings to an end a two-year effort by the lender to sell the portfolio as part of an agreement with the European Commission to divest assets in exchange for accepting state aid during the financial crisis. A previous effort to sell the portfolio to Axa Private Equity collapsed last year, two people familiar with the situation added.

Secondaries direct transactions have been relatively rare in recent years. Such deals differ from a normal secondaries transaction because they involve the transfer of a whole portfolio into a new fund. Non-direct deals involve the sale of fund interests rather than complete portfolios from banks and insurers and are seen as less complex transactions “as you can take a more general view on risk and do them [purchases] more quickly”, according to one secondaries manager.

Recent secondaries direct transactions include the sale of a majority stake of the former HBOS integrated finance unit by Lloyds Banking Group and Credit Agricole’s sale of its direct portfolio – both of which were purchased by Coller Capital in July 2010 and March 2012 respectively.

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However, according to Thomas Liaudet, a partner at placement agent and secondaries specialist Campbell Lutyens, secondaries direct deals are likely to form a greater part of deal flow in the coming year.

Liaudet said: “Many captive funds are likely to face pressures from their parent in the next 12 months as regulatory and liquidity concerns begin to bite harder. Equally many independent managers are likely to face increasing LP pressure to generate returns, in both cases secondary direct transactions can provide a solution.

“It’s one of the market area where primary and secondary capital have to meet to make a deal happen.”